Commenting, Paul Diggle, property economist at capital Economics, said: “Market conditions are loosening, as the supply of properties for sale continues to increase and buyer numbers stall.
“Consistent with our forecast for a double-dip, surveyors now expect house prices to fall in the next three months.
“The RICS survey indicates that the short-term supply shortages that drove prices upwards last year appear to be reversing. For only the second time since late-2008, a 5.1% majority of surveyors reported a fall in new buyer enquiries.
“Meanwhile, the abolition of HIPS appeared to continue bringing sellers to the market, as the balance of surveyors reporting an increase in new sales instructions reached a three year high of 27.2%.
“As a result, whilst the number of sales per surveyor crept up slightly, the average amount of unsold stock on surveyors’ books leapt up to 66.7. As such, there were 12 months of unsold stock on the market in June, the highest amount for a year.
“Although a positive net balance of 9.5% of surveyors reported that prices rose over the past three months, the forward looking indicator has turned negative. A balance of 3.6% of surveyors expect that prices will fall in the coming three months.
“Meanwhile, the increase in the CLG measure of house prices seems at odds with loosening market conditions and the falls in prices reported by Halifax, Acadametrics and the Land Registry. May’s 0.7%m/m rise in prices takes the annual rate of change to 11%y/y.
“The contradictory message coming from the different indices highlights the continued uncertainty in the housing market.
“The fact that surveyors now anticipate house price falls only serves to strengthen our own view that a second round of the correction is imminent.
“With market conditions becoming less favourable for sellers, we expect that the house price falls already reported on some indices will become widespread in the months ahead.”
